Question 1

For a competitive firm,with a change in the price of labor,_____ demand curve for labor.

Accepted Answer

A) the substitution effect reinforces the output effect,leading to a downward-sloping 
B) the substitution effect reinforces the output effect,leading to an upward-sloping 
C) the substitution effect offsets the output effect,leading to a downward-sloping 
D) the output effect offsets the substitution effect,leading to an upward-sloping 
A) the substitution effect reinforces the output effect,leading to a downward-sloping 
B) the substitution effect reinforces the output effect,leading to an upward-sloping 
C) the substitution effect offsets the output effect,leading to a downward-sloping 
D) the output effect offsets the substitution effect,leading to an upward-sloping

Question 2

An output market monopoly:

Accepted Answer

A) pays a wage that is greater than marginal value product of labor. 
B) employs fewer workers than would be employed under competition. 
C) pays a wage greater than the marginal cost of labor. 
D) has an labor demand curve that lies above the marginal value product curve of labor. 
A) pays a wage that is greater than marginal value product of labor. 
B) employs fewer workers than would be employed under competition. 
C) pays a wage greater than the marginal cost of labor. 
D) has an labor demand curve that lies above the marginal value product curve of labor.

Question 3

The labor supply curve facing all industries in the economy is most likely to be:

Accepted Answer

A) horizontal. 
B) vertical. 
C) upward sloping. 
D) downward sloping. 
A) horizontal. 
B) vertical. 
C) upward sloping. 
D) downward sloping.

Question 4

Which of the following is true of the marginal value product curve (MVP)and the marginal revenue product curve (MRP)for an output market monopolist?

Accepted Answer

A) The MVP and the MRP are upward sloping curves that are parallel to each other. 
B) The MVP lies above the MRP and is downward-sloping. 
C) The MRP and the MVP coincide and are parallel to the horizontal axis. 
D) The MRP and the MVP intersect at the equilibrium wage rate. 
A) The MVP and the MRP are upward sloping curves that are parallel to each other. 
B) The MVP lies above the MRP and is downward-sloping. 
C) The MRP and the MVP coincide and are parallel to the horizontal axis. 
D) The MRP and the MVP intersect at the equilibrium wage rate.

Question 5

Refer to Figure 16-1.The firm was initially at point A.It will move to point B if:

Accepted Answer

A) the price of the final product increases. 
B) the wage rate increases. 
C) the cost of capital rises. 
D) the demand for the final product falls. 
A) the price of the final product increases. 
B) the wage rate increases. 
C) the cost of capital rises. 
D) the demand for the final product falls.

Question 6

A profit-maximizing competitive firm will hire labor up to the point where _____.

Accepted Answer

A) the price of the good equals the marginal value product of labor 
B) the wage rate equals marginal product of labor 
C) the wage rate equals marginal value product of labor 
D) the wage rate equals the marginal revenue 
A) the price of the good equals the marginal value product of labor 
B) the wage rate equals marginal product of labor 
C) the wage rate equals marginal value product of labor 
D) the wage rate equals the marginal revenue

Question 7

A monopoly firm faces the output demand curve P = 25 - 0.5Q,where P is the price of the final product and Q is the level of output.The production function is given by Q = 5X,where X is the only input used in production.Each unit of X is bought by the firm at a constant price of $25 per unit.Based on this information,what level of input would the profit-maximizing monopoly employ?

Accepted Answer

The total revenue curve for the monopoli

Question 8

Suppose that lawyers are hired in two industries,A and B.Both industries are in equilibrium with identical labor supply and demand curves.Given other things are unchanged,if the demand for lawyers falls in industry B,the wage rate:

Accepted Answer

A) will fall in both industries,while employment will fall in B and increase in A. 
B) as well as employment will fall in both industries. 
C) as well as employment will fall in B,while there will be no change in A. 
D) will stay constant since all participants are price-takers,but employment will fall in A and B. 
A) will fall in both industries,while employment will fall in B and increase in A. 
B) as well as employment will fall in both industries. 
C) as well as employment will fall in B,while there will be no change in A. 
D) will stay constant since all participants are price-takers,but employment will fall in A and B.

Question 9

Explain the shapes of the supply curve of labor for all industries together and the labor supply curve for a particular industry.

Accepted Answer

The supply curve of labor for all indust

Question 10

Which of the following is true of a competitive industry's labor demand curve?

Accepted Answer

A) The industry labor demand curve is a horizontal summation of the individual firm's demand curves for labor. 
B) The industry labor demand curve is less elastic than the individual firm's demand curves for labor. 
C) The industry labor demand curve is a vertical summation of the individual firm's demand curves for labor. 
D) The industry demand curve shows that at a lower price,less of the input is employed in the industry. 
A) The industry labor demand curve is a horizontal summation of the individual firm's demand curves for labor. 
B) The industry labor demand curve is less elastic than the individual firm's demand curves for labor. 
C) The industry labor demand curve is a vertical summation of the individual firm's demand curves for labor. 
D) The industry demand curve shows that at a lower price,less of the input is employed in the industry.

Question 11

Assume that the marginal product of labor employed by a competitive firm is 2 units and that the wage rate is $10.To maximize profits,the firm will hire an extra unit of labor to the point where the product price is equal to _____.

Accepted Answer

A) $10 
B) $3 
C) $4 
D) $5 
A) $10 
B) $3 
C) $4 
D) $5

Question 12

The marginal value product of labor curve for a competitive firm is:

Accepted Answer

A) upward-sloping because marginal product of labor and capital are diminishing. 
B) downward-sloping because marginal product of labor is diminishing. 
C) upward-sloping because marginal product of labor and marginal revenue are diminishing. 
D) downward-sloping because average product of labor is diminishing. 
A) upward-sloping because marginal product of labor and capital are diminishing. 
B) downward-sloping because marginal product of labor is diminishing. 
C) upward-sloping because marginal product of labor and marginal revenue are diminishing. 
D) downward-sloping because average product of labor is diminishing.

Question 13

The following figure shows the marginal cost [MC],average cost [AC],and demand [D] curves for a monopsonist in the labor market.
Figure 16-2  
-Refer to Figure 16-2.When the monopsonist is in equilibrium,the level of labor employed is _____.

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 14

The long-run industry demand for labor is likely to be the most elastic when:

Accepted Answer

A) wages form a significant portion of total costs. 
B) firms in the industry face L-shaped isoquants. 
C) the supply of other inputs is elastic. 
D) the product demand curve is inelastic. 
A) wages form a significant portion of total costs. 
B) firms in the industry face L-shaped isoquants. 
C) the supply of other inputs is elastic. 
D) the product demand curve is inelastic.

Question 15

Which of the following will lead to an upward shift of a competitive firm's marginal value product curve for labor?

Accepted Answer

A) A decrease in the price of the final product 
B) An increase in the wage rate 
C) An increase in the amount of other inputs used 
D) A decrease in the demand for the final product 
A) A decrease in the price of the final product 
B) An increase in the wage rate 
C) An increase in the amount of other inputs used 
D) A decrease in the demand for the final product

Question 16

Given that w is the wage rate and MPL is the marginal product of labor (the only variable input),w/MPL shows:

Accepted Answer

A) the extra output obtained from hiring one more worker. 
B) the marginal cost of producing one more unit of output. 
C) the average variable cost of hiring one more unit of labor. 
D) the marginal product from hiring one more unit of labor. 
A) the extra output obtained from hiring one more worker. 
B) the marginal cost of producing one more unit of output. 
C) the average variable cost of hiring one more unit of labor. 
D) the marginal product from hiring one more unit of labor.

Question 17

A firm faces total costs,C,price of capital,r,and price of labor,w.
(
A)With capital (K)on the y-axis and labor (L)on the x-axis,graph a firm's optimal combination of inputs for producing Q0 units of output.

Accepted Answer

@#IMG-DLM& The input substitution effect is repres

Question 18

Refer to Figure 16-2.The firm will move from point B to point C when:

Accepted Answer

A) the price of capital increases. 
B) the total output produced increases. 
C) the total output produced falls. 
D) the price of labor increases. 
A) the price of capital increases. 
B) the total output produced increases. 
C) the total output produced falls. 
D) the price of labor increases.

Question 19

Given that other inputs are kept fixed,the input demand curve for an output market monopolist is equal to the:

Accepted Answer

A) marginal value product curve. 
B) marginal revenue product curve. 
C) marginal cost curve. 
D) marginal product curve. 
A) marginal value product curve. 
B) marginal revenue product curve. 
C) marginal cost curve. 
D) marginal product curve.

Question 20

A competitive firm produces an output of 200 units for a price of $15 per unit.The extra output produced by one extra worker is 5 units.In order to maximize it profit,the firm should pay a wage equal to _____.

Accepted Answer

A) $20 
B) $75 
C) $15 
D) $10 
A) $20 
B) $75 
C) $15 
D) $10

For a competitive firm,with a change in the price of labor,_____ demand curve for labor.

An output market monopoly:

The labor supply curve facing all industries in the economy is most likely to be:

Which of the following is true of the marginal value product curve (MVP)and the marginal revenue product curve (MRP)for an output market monopolist?

Refer to Figure 16-1.The firm was initially at point A.It will move to point B if:

A profit-maximizing competitive firm will hire labor up to the point where _____.

Suppose that lawyers are hired in two industries,A and B.Both industries are in equilibrium with identical labor supply and demand curves.Given other things are unchanged,if the demand for lawyers falls in industry B,the wage rate:

Explain the shapes of the supply curve of labor for all industries together and the labor supply curve for a particular industry.

Which of the following is true of a competitive industry's labor demand curve?

Assume that the marginal product of labor employed by a competitive firm is 2 units and that the wage rate is $10.To maximize profits,the firm will hire an extra unit of labor to the point where the product price is equal to _____.

The marginal value product of labor curve for a competitive firm is:

The following figure shows the marginal cost [MC],average cost [AC],and demand [D] curves for a monopsonist in the labor market. Figure 16-2 -Refer to Figure 16-2.When the monopsonist is in equilibrium,the level of labor employed is _____.

The long-run industry demand for labor is likely to be the most elastic when:

Which of the following will lead to an upward shift of a competitive firm's marginal value product curve for labor?

Given that w is the wage rate and MP_Lis the marginal product of labor (the only variable input),w/MP_L shows:

A firm faces total costs,C,price of capital,r,and price of labor,w. ( A)With capital (K)on the y-axis and labor (L)on the x-axis,graph a firm's optimal combination of inputs for producing Q₀ units of output.

Refer to Figure 16-2.The firm will move from point B to point C when:

Given that other inputs are kept fixed,the input demand curve for an output market monopolist is equal to the:

A competitive firm produces an output of 200 units for a price of $15 per unit.The extra output produced by one extra worker is 5 units.In order to maximize it profit,the firm should pay a wage equal to _____.

An Introduction to Microeconomics

Supply and Demand

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

Exam 16: Employment and Pricing of Inputs

For a competitive firm,with a change in the price of labor,_____ demand curve for labor.

An output market monopoly:

The labor supply curve facing all industries in the economy is most likely to be:

Which of the following is true of the marginal value product curve (MVP)and the marginal revenue product curve (MRP)for an output market monopolist?

Refer to Figure 16-1.The firm was initially at point A.It will move to point B if:

A profit-maximizing competitive firm will hire labor up to the point where _____.

Suppose that lawyers are hired in two industries,A and B.Both industries are in equilibrium with identical labor supply and demand curves.Given other things are unchanged,if the demand for lawyers falls in industry B,the wage rate:

Explain the shapes of the supply curve of labor for all industries together and the labor supply curve for a particular industry.

Which of the following is true of a competitive industry's labor demand curve?

Assume that the marginal product of labor employed by a competitive firm is 2 units and that the wage rate is $10.To maximize profits,the firm will hire an extra unit of labor to the point where the product price is equal to _____.

The marginal value product of labor curve for a competitive firm is:

The following figure shows the marginal cost [MC],average cost [AC],and demand [D] curves for a monopsonist in the labor market. Figure 16-2 -Refer to Figure 16-2.When the monopsonist is in equilibrium,the level of labor employed is _____.

The long-run industry demand for labor is likely to be the most elastic when:

Which of the following will lead to an upward shift of a competitive firm's marginal value product curve for labor?

Given that w is the wage rate and MPL is the marginal product of labor (the only variable input),w/MPL shows:

A firm faces total costs,C,price of capital,r,and price of labor,w. ( A)With capital (K)on the y-axis and labor (L)on the x-axis,graph a firm's optimal combination of inputs for producing Q0 units of output.

Refer to Figure 16-2.The firm will move from point B to point C when:

Given that other inputs are kept fixed,the input demand curve for an output market monopolist is equal to the:

A competitive firm produces an output of 200 units for a price of $15 per unit.The extra output produced by one extra worker is 5 units.In order to maximize it profit,the firm should pay a wage equal to _____.

An Introduction to Microeconomics

Supply and Demand

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

Given that w is the wage rate and MP_Lis the marginal product of labor (the only variable input),w/MP_L shows:

A firm faces total costs,C,price of capital,r,and price of labor,w. ( A)With capital (K)on the y-axis and labor (L)on the x-axis,graph a firm's optimal combination of inputs for producing Q₀ units of output.